Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
Crypto platforms welcome Frydenberg’s regulations
From being a ‘crypto critic’, Australia has quickly transformed itself to soon be a ‘crypto leader’ by proposing a framework for managing cryptocurrencies and crypto companies, in the biggest shakeup in the country’s payment systems in 25 years.
Covid-19 showed us how quickly society digitised its payments systems with the onset of Afterpay and its swift expansion. For that reason, it makes sense to be ahead of the curve rather than behind. Australia is one country that wants to compete against the UK, US, and Singapore in the cryptocurrency sector and Australian crypto exchange Cointree believes “regulation will be a powerful advantage for the asset class.”
According to a survey published by comparison site Finder, Australia has the third-highest rate of crypto ownership at 17.8%, beating out countries such as Indonesia (16.7%) and the city of Hong Kong, a special administrative region of China (15.8%). Australia is one of the most bullish on cryptocurrencies than most other countries and banking regulations make it easy to transact whereas other countries have a lot more laws and challenges when transacting in cryptocurrencies.
And so, Treasurer Josh Frydenberg has moved to legislate the “largest reforms to our payments systems in a quarter of a century” following the Senate Select Committee’s report on Financial Technology and Regulatory Technology.
Australia’s leading cryptocurrency marketplace and crypto exchange, Cointree, was thrilled at the announcement with CEO Shane Stevenson saying, “While we understand some investors will prefer the ‘wild west’ approach to regulation, it is our opinion that a poorly regulated market brings risk and is ultimately a barrier to wealth generation.”
It’s a clear step in the right direction, especially if Australia wants to become more competitive and cement itself as a crypto leader. Regulation is a key together with a strong framework to provide certainty. “This interest from government in implementing a more comprehensive and modern legislation framework could also bring the added benefit of an overall price increase as more sophisticated investors including institutional and SMSF investors join the asset class in greater volumes,” he said.
Companies that transact in cryptocurrencies will need to be licenced to give investor’s confidence that their money is safe and secure. The government will also work out a licensing plan for crypto exchanges next year. The recent Senate Select Committee published 12 recommendations in its latest report which, if implemented, will result in Cointree and other exchanges requiring a new category of market licence.
“As a new and lucrative asset class, there have been a number of competitors enter the market in a very short time frame, and as one of the oldest running exchanges who are focussed on educating newcomers to the sector, it is disappointing to see slow responses from governments impacting new crypto investors,” said Mr Stevenson.
“Customer protection is imperative to us and is one of the main reasons we developed the free education portal, allowing our members and newcomers the opportunity to gain a solid understanding on the asset class, including their tax obligations, mining, and investing using an SMSF among other frequently asked questions.
In such a short time, Australia has clearly demonstrated that it has what it takes to take the lead in cryptocurrency. The newly regulated framework surrounding cryptocurrency could provide significant economic benefits to the Australian economy while driving innovation and assisting the economy with its transition to net-zero.
